Anaheim’s New Majority Eager to Set a Different Course

Anaheim, a city long focused on Disneyland and developing a robust tourism industry, is about to see a dramatic change in leadership with a City Council majority heavily opposed to subsidies for big businesses preparing to take power in December.

Mayor Tom Tait and Councilman James Vanderbilt, who have spent most of the past few years on the losing end of 3-2 votes, will be joined by Democrat Jose F. Moreno and Republican Denise Barnes, to form a majority eager to undo some of the major decisions made by the current City Council.

The shift in power is the result of the city’s first district election and a contentious campaign season that pitted the city’s business establishment against a majority Latino population that has long felt marginalized by its leaders.

At first blush, Tait, a small-government libertarian, and Moreno, a populist Democrat who was part of the lawsuit that triggered the transition to district elections, appear to be strange bedfellows.

But uniting them is the belief that the city’s current leadership is more interested in advancing the interests of the tourist industry than the welfare of its neediest residents.

“What we don’t have is this majority that will vote in lockstep with crony capitalism,” said Tait, who will be termed out in 2018. “The new majority – they’re independent people who will do what they think is right, but I think what you’ll see in common is a pivot away from the resort towards the community.”

Different Paths

Tait, a wealthy businessman and once a close friend of former Mayor-turned-lobbyist Curt Pringle, has seen many of his political relationships steadily erode since becoming a vocal opponent of economic assistance deals.

Kenny Rivera for Voice of OC

Jose F. Moreno (pictured at an election night party) came back to win over Jordan Brandman in a tight race for Anaheim City Council.

Meanwhile, Moreno, an academic and longtime Latino advocate, came to the United States as an undocumented immigrant before becoming naturalized under a 1986 amnesty bill.

Yet, despite their divergent paths, Tait and Moreno say they share more than their party affiliations might suggest.

“Actually, over the last four years we’ve found ourselves agreeing on almost everything,” Tait said. “People who think that we don’t share things in common are looking at it [through] a partisan lens.”

Yet their prescriptions for a healthy Anaheim are a bit different. Tait – who spoke in 2013 of “two Anaheims” divided by wealth and political power – has not proposed any specific spending to alleviate poverty and has tended to look for private solutions.

He has spent the past two years largely focused on his “City of Kindness” campaign and said he’d like to ramp up that campaign over the next two years by “building on the social infrastructure of the city.”

“[It’s] a holistic way of dealing with our issues rather than treating the symptoms,” said Tait. “Crime goes down, bullying at schools goes down, senior neglect goes down…it’s the community taking care of one another and not necessarily relying on city hall.”

He is not, however, opposed to public programs in their entirety. Tait has called for more robust bus service to serve the city’s working poor and, like Moreno, says improving parks and public recreation facilities, focusing on the city’s at-risk youth and reducing hurdles for small business are key priorities.

Moreno, who has close ties to resort workers’ unions, has spoken more broadly about raising wages (by raising the minimum wage or developing new job opportunities), building more affordable housing and creating new youth programs.

The incentive program, which allows developers of four-diamond luxury hotels to keep 70 percent of the hotel bed tax revenue that they collect for 20 years, has spawned subsidy deals worth more than $500 million in rebated tax revenue.

While it is unclear to what extent the new council can undo the agreements approved by the previous council, one potential avenue is challenging the current interpretation of a city charter amendment approved by voters in 2014.

The amendment, which was part of the city’s change to the district-based electoral system, expanded the city council from five to seven seats, and increased the number of votes needed to pass an ordinance from three to four.

The city, through its spokesman Mike Lyster, said the amendment won’t take effect until the council is sworn in on Dec. 13. But Moreno and Tait are questioning whether any ordinances passed since the 2014 vote are valid, including the hotel subsidies,

“The charter doesn’t say ‘four out of five’ or ‘four out of seven,’ so it’s clear. You need four votes to pass an ordinance,” Moreno said.

The Anaheim Streetcar project, another favorite of the current council majority, is almost certain to see its final demise.

Tait says he will also try to end all staff work on the project, which has failed to receive federal or state funding or support from the board of the Orange County Transportation Authority.

“What’s needed in Anaheim is a more robust bus system the people could use,” Tait said. “I’d like to see that transit money used for projects that support people in Anaheim – not just the resort and convention center.”

Any attempts to roll back the subsidies would face resistance from the three other members of the council – incumbent Councilwomen Kris Murray and Lucille Kring, and incoming District 5 Councilman Steve Faessel.

Faessel, a former Planning Commissioner who was elected to the District 5 council seat, is generally opposed to the idea of rescinding actions by the previous council.

“I believe if we try to undo some of these, there could certainly be some legal ramifications and I don’t want to get back into the difficulty between the council members in the various antagonistic conditions that we had before,” said Faessel. “There’s enough on the agenda moving ahead to keep us busy.”

He was among a slate of candidates supported by Disney-funded political action committees, and spoke in favor of the luxury hotel subsidies at forums and on the campaign trail.

But Faessel emphasized his desire to work with his council colleagues and pointed to interests he shares with Tait: investments in streets and parks, removing hurdles for small business and maintaining public safety staffing.

Murray, a staunch defender of the city’s use of tax subsidies and its Disney-led business establishment, argues that it’s the council’s attention to business that has made most of the city’s services possible.

She said rescinding the subsidies would damage a crucial source of hotel tax revenue and may require the city to consider raising taxes and fees. “The alternative, if the majority of the council chooses to [roll them back], then we have to look to taxes and fees, to make up the difference,” said Murray, who will be termed out along with Tait in 2018.

Murray has also rejected the notion that neighborhoods have suffered as a result of the city’s relationship with the resort district. She points to recent park projects funded by Disney, including new skateboard parks at Palm Lane and Schweitzer Park.

“What’s often lost in elections is what’s happening on the ground, and Anaheim has governed very effectively,” said Murray. “There is heavy, heavy neighborhood investment.”

Possible Housecleaning

The shift could also mean a shakeup of the city’s top leadership. Tait has often clashed with city officials, accusing them of manipulating budget numbers to inflate the resort district’s contributions to the budget and downplay the impacts of hotel subsidies.

At recent council meetings, some residents have called for the new council to fire City Manager Paul Emery as one of their first acts.

Join the discussion

Here I had hoped the new Council could help wean me off the habit of slamming my head against a wall to make the frustration-driven pain stop. Silly me.

There is not one iota of evidence that being on the losing end of things is somehow going to bring out the kinder, gentler versions of Murray and Kring, who even as the majority could not be content to simply outvote the Mayor for years, they had to double-down on the neighborhood bully act by crushing every form of authority he might have been granted as Mayor, and silenced his attempts at even basic answers to clearly bogus rubber stamp reports any 4th grader could dispute. (I called the question! I called the question!)

Even IF (and it’s a BIG “if”) the old majority turned new minority now suddenly breaks into rounds of Kumbaya (with Emery on guitar?) the armed truce disguised as some form of peace is not a reason to strip taxpayers of our rights to good government by letting bad past actions stand without at least a review that was denied to the Mayor at the time of those votes.

In an alternate universe somewhere, a nice officer tells a crime victim, “Well yes, we CAN show the VIN number of the car he is in actually belongs to YOU, but the thief has already loaded his own CDs into the audio player, and he DID put new floor mats in, as your were rather worn, and since you seem to have adjusted to getting to work and picking up the kids from school using public transportation, how about we just call it good and avoid making a scene about it? After all, lady, do you have any idea how much paperwork is involved with tagging the car as evidence, and getting it released back to you? And do you really want to be responsible for the enormous cost to the taxpayers of having to house this prisoner during his term for car theft? Hey everyone, this lady wants to cost YOU your hard earned tax dollars just so SHE doesn’t have to take the bus anymore!”

kburgoyne

So, this is a big improvement. However they also need to be very careful to work “with” Disney as opposed to working “for” Disney.

Considering the amount of business Disney accounts for, directly and indirectly, within Anaheim, it would be stupid to turn antagonistic toward Disney. HOWEVER, it was also WRONG to be Disney’s lapdog. Disney has even made statements that basically acknowledged they’d often ask for things simply because they could get them, not because it was “make or break” if they got them or not.

If you’re a business who figures a city council is going to hand you things, as a business person you’d be stupid not to take them. Not handing things to Disney was always the responsibility of the council, and not the responsibility of Disney to not ask for them. That’s like saying a five year old is responsible for not asking for ice cream, rather than the adult not giving the child ice cream just because the child asked for it.

There is a LOT of constructive things that can be accomplished for Anaheim through working “with” Disney as opposed to working “for” Disney. Did anybody actually discuss with Disney their real business concerns about their being a ticket tax, or did they just roll over when Disney said they didn’t like a ticket tax?

The truth is, there is legitimate reason for an amusement park to not really like a ticket tax, and somebody who understands the business model of amusement parks would appreciate it. There isn’t anybody on the city council who tries to understand the business model of amusement parks, is there.

Amusement parks try to set entry prices at whatever they can get away with while still getting as many people in through the front gate as possible. A ticket tax has an impact upon that, and increases the disincentives for people to go through the front gate.

What amusement parks know is that people, once they’re inside the gate, are somewhat less concerned about prices when it comes to buying things inside the park. They’ve already paid to go inside the park. Now they want to enjoy themselves and do what they want, which often includes buying what they want — food, memorabilia, etc.

This can be seen to simply doing a little quick research. Any of the councilmembers ever think to do that?

Go to a normal street corner Starbucks and write down the prices for all the common drinks. Then go to the Starbucks in Disneyland and/or California Adventure and write down the prices for those same drinks. That exercise would be a HUGE education for the Anaheim city council.

The exact same drink inside the parks costs very roughly around 50 cents more than the drink outside the park. Consider that Disney raises the price of a $3.50 drink to $4.00. That’s a 14% “tax” Disney applies to the drink for selling it inside their park.

The question one needs to ask oneself is, why isn’t Disney worried that applying a 14% “tax” to an already expensive drink is simply unacceptable and will kill sales of the drink? Because Disney knows people have already paid their admission price, which makes that cost now a “sunk cost” (not being considered by the person anymore). The person is now inside the park and they want to have fun, which include being able to buy that drink they want without spending time worrying about whether its too expensive and they can get it for cheaper outside the park.

So what does understanding the business model of amusements tell us about a city working intelligently with a business like Disney to get extra revenue (within reason)? Don’t try to tax the entry ticket because at that point the potential customers are more sensitive about what they have to pay. However, DO apply a small tax on the stuff sold inside the park because, as the amusement parks already know, people are less sensitive to the cost at that point.

Basically, if Disney thinks (knows) they can get away with applying a 14% “Disney tax” to a Starbucks drink, then it’s rather difficult for them to realistically argue that Anaheim applying another 1% city tax on top of the 14% “Disney tax” is somehow disastrous. This is the type of intelligent things that can result from a city council working “with” Disney (and others) to accomplish desired (and responsible) city goals, rather than working “for” Disney and not addressing the other issues a city faces.

David Zenger

Nobody has ever proposed being antagonistic toward Disney. Where did you get that notion?

Vern Pat Nelson

It’s an easy (if simplistic) conclusion to jump to, given some of our rhetoric. Of course they can be dealt with respectfully as a very important business here, without them running the town.

David Zenger

I haven’t seen anybody ever suggest or imply that Disney should be dealt with antagonistically. That’s just klepto residuum® talk.

They should be dealt with EXACTLY the same as any other business. No more or less.

Cynthia Ward

Not just a “gate tax” (which oddly enough NOBODY was proposing) the exemption negates ANY tax, fee, cost, etc of ANY KIND on any property owned, leased, or controlled by Disney in Anaheim.

Yes Disney is simply taking advantage of something offered to them. Now keep in mind the elected officials offering the one sided bennies to Disney were put into place BY Disney…so forgive me for seeing a slightly gamed system here.

Nobody I know of wants to be punitive with Disney (we are not a bunch of idiots, we understand the whole “golden goose” thing.) The objection all along has been the lack of transparency, with special interest deals popping up on the agenda with NO prior notice that anyone is even discussing this stuff, because staff has been authorized behind the scenes without public discussion to cut a deal with the Council’s corporate handlers, and once the deal is done and there is nothing left to be negotiated the public is let in on the secret.

The lack of due diligence by staff is also a huge problem for many of us. For instance, the gate tax exemption, and the hotel bed tax deals ALL track back to agreements in the 1990s, yet staff failed (or refused) to even READ the documents (I know because when I asked for them I had to pay $40 extra to go get them from off site storage, AFTER the agreements were signed, so nobody at City Hall had them much less checked them for what had been already agreed to. Had they bothered to check they would have seen that the Disney hotel is ALREADY OBLIGATED to be built (in fact Disney appears a bit behind schedule) and must be built at the same level as Grand Californian, so what did the “incentive” actually “incentivize?” And the Anaheim Plaza was already obligated to be built as a high rise, thanks to the 1992-93 Specific Plan for the Resort area outside of Disney. The steel frame high rise standard is what the City was after, as they tend to be 4 star. So when 2 of the 3 hotels are already on the books to be built to the standard the City is “incentivizing’ we have not encouraged anything we were not already getting, we simply offered up a gift of public funds, and THAT DOES DESERVE to be reviewed to see if laws were broken.

Please remember, taxpayers see NONE of the post 1995 era taxes from Disney. NONE. No bed tax, sales tax, property tax above what we collected in Clinton administration. The dividends for our ONE AND A HALF BILLION DOLLAR public investment were supposed to be the taxes collected from the hotels built NOW, but Council is now giving away what was supposed to be our return on investment. That money was intended to meet the escalating costs of current service levels, much less catch up on the decades of deferred maintenance, including crumbling sidewalks, curbs, and gutters, streets with potholes so deep and old that they have palm trees growing out of them, parks in such poor condition that soccer leagues won’t play in Anaheim so Anaheim kids cannot fund raise with tournaments here like other soccer groups in other cities can do. All this in the “well run City” that Murray and company keep deluding themselves into thinking they are running.

Our neighborhoods have taken a back seat to the tourism industry for too long, we paid our portion of the investment, and now it is time for us to see the dividends. As Dr. Moreno said, we have been subsidizing the children of tourists and now it is time to invest in our own kids futures. We are done bing put off, and our city cannot defer the maintenance anymore without our property values (and property taxes) taking a hit, as we are already seeing. No more.

David Zenger

“I don’t want to get back into the difficulty between the council members in the various antagonistic conditions that we had before,”

The antagonism came from the previous council majority leaving the back door of the store unlocked so the place could be looted.

It sounds nice to want to play nice, but when your pals are working for a few big corporations and billionaires you should expect that phony collegiality will not prevail.

RyanCantor

“The alternative, if the majority of the council chooses to [roll them back], then we have to look to taxes and fees, to make up the difference,” said Murray

This is why you’re a total failure in the world of economic policy, Ms. Murray.

You’re describing a false duality. Rolling the policies back will cause absolutely no harm to the economy because those policies did nothing other than divert tax revenue into shareholder profits. No tax or fee increases will be necessary because NOTHING WILL FREAKING CHANGE.

But this is what bad politicians do– they distort the truth of an issue so it fits neatly into a teeny tiny box they can understand. This is not about subsidizing corporations OR raising taxes and fees. Anyone who thinks this is a correct interpretation of reality is not qualified for public service.

RyanCantor

“I believe if we try to undo some of these, there could certainly be some legal ramifications and I don’t want to get back into the difficulty between the council members in the various antagonistic conditions that we had before,” said Faessel.

I got a shiny nickel that says it’ll be cheaper to deal with the legal ramifications than give away a cool half billion in subsidy checks.

Anyone want to take that bet? Mr. Faessel?

Every single hotel will still be built. Disney also will build it’s part expansion. I’m betting a net gain in revenue due to the taxpayer of $499,000,000.

Come on, Steve. Do your job and make the hard decisions.

mike

Hopefully the hotels pull out and build next door like they have for many years.
It’s the same issue that caused doEns of hotels to be built south of anehim while part of the resort area remain stagnant with drinking g and prostitute risked motels and a dying shopping center missing its three planned hotels.

The mentality of some people, kill the cow and eat steak for a few days instead of taking care of the cow and have milk for a lifetimes

Cynthia Ward

Mike, those hotels remained stagnant because of economic uncertainty and waves of economic downturns, and an economist named Daniel Robbins explained that here on Voice of OC already. It had nothing to do with a lack of subsidy. Garden Grove got hotels built because they gave away land AND TOT, but with the death of Redevelopment nobody is going to do that so we are not really competing with GG now. In fact, the argument that Anaheim “competes” with other cities assumes an even playing field. But the 23 millions visitors are not coming to GG or Los Angeles they are coming to Anaheim, and there are always going to be people willing to pay for the location because that travel time to and from the park is time not spent using the high value tickets the families paid for. If Anaheim invested in our communities and began defining a “world class city” as a place in good repair with adequate law enforcement coverage, the hotels would be pounding on the door begging for the chance to build here. AND the locals would be happy, with better property tax base as the standard for our economy instead of the volatile tourism industry. If we began defining ourselves as a world class city worthy of investing in neighborhoods outside the Resort, better jobs would show up here, wanting to operate in our well run town. THAT, sir, is not just having milk, it is the fine art of raising award winning cattle and eating steak for the long term. Anaheim has screwed that up royally, and it is time to shift priorities.